SEC probes into Bear Stearns hedge fund.

This is not surprising: The SEC is looking into the well-covered woes of Bear Stearn's troubled credit-oriented hedge funds. Business Week Online reports that regulators are wondering why and how the firm was able to restate the losses of one fund in April. At first, the firm said the losses were in the 6.5 percent range. Three weeks later, according to the magazine, the losses were restated to 19 percent. This is a huge problem. And many think that the reputation of CEO Jimmy Cayne is on the line. It's no surprise that Bear Stearns has had problems both in its proprietary funds and in its prime brokerage operations. This will only compound the issues. There are likely other funds in similar straights. It's fair to say that more fund blow-ups will bring more regulatory interest. You can sense the angst on the part of regulators. Their reputations are also on the line, in a way.

Our take on this news: Where was the SEC to begin with to oversee their behavior in the beginning?